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The pure expectations theory assumes that a one-year bond purchased today will have the same return as a one-Year bond purchased five years from now.

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The pure expectations theory assumes that a one-year bond purchased today will have the same return as a one-Year bond purchased five years from now. False True The yield on a one-year Treasury security is 4.0000%, and the two-year Treasury security has a 5.4000% yield. Assuming that the pure expectations theory is correct, what is the market's estimate of the one-year Treasury rate one year from now? 5.7970% 7.7748% 6.8200% 8.6614% Recall that on a one-year Treasury security the yield is 4.0000% and 5.4000% on a two-year Treasury security. Suppose the one-year security does not have a maturity risk premium, but the two-year security does and it is 0.4000%. What is the market's estimate of the one-year Treasury rate one year from now' 7.6330% 5.1090% 6.8510% 6.0100% Suppose the yield on a two-year Treasury security is 5.83%, and the yield on a five-year Treasury security is 6.20%. Assuming that the pure expectations theory is correct, what is the market's estimate of the three-year Treasury rate two years from now' 6.53% 6, 69% 6.45% 661%

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